President Joe Biden will be delivering remarks following the release of the August jobs report, which indicates that the economy added 187,000 positions. This is evidence of a labor market that is still resilient despite the high interest rates imposed by the Federal Reserve. The event is scheduled to take place at 12:15 p.m. ET.
While last month’s job growth showed an increase compared to July’s revised gain of 157,000, it still suggests a slowdown in hiring compared to the strong gains seen last year and earlier in the year. From June through August, the economy added 449,000 jobs, the lowest three-month total in three years. Additionally, the gains for June and July were revised downward by a combined 110,000.
The Labor Department’s report for Friday also revealed that the unemployment rate rose from 3.5% to 3.8%, the highest level since February 2022. However, this increase was due to a positive reason: a significant number of people, 736,000 to be exact, started actively looking for work last month, the highest number since January. Not all of them were able to find jobs immediately. It’s important to note that only those actively seeking employment are counted as unemployed.
In August, the proportion of Americans who either have a job or are actively searching for one increased to 62.8%, the highest level since February 2020 when the COVID-19 pandemic hit the U.S. economy.
The slowing job market could potentially lead to an economic slowdown and provide reassurance to the Federal Reserve regarding easing inflation. The Fed’s 11 interest rate hikes have already contributed to a decline in inflation from a peak of 9.1% last year to the current 3.2%. Many economists believe that with signs of inflation decelerating, the Fed may no longer see the need for further rate hikes.
The recent jobs report also indicates a decrease in wage gains, which could signal to the Fed that inflation pressures are cooling off. Average hourly pay rose by 0.2% from July to August, the smallest increase seen in a year and a half. When compared to August 2022 figures, wages were up by 4.3%, slightly lower than the 4.4% increases seen in both July and June.